Summary
The Supreme Court upheld West Bengal sales tax on imported cigarettes sold from bonded warehouses to foreign-going ships as ship stores. Appropriation occurred within the State after the goods had moved beyond the customs station; the warehouses were not shown to be within the notified customs area relevant to the CST definition. The sales neither occasioned import nor qualified as export for consumption aboard ship. Customs-duty relief did not itself confer sales-tax exemption, and airport duty-free sales were distinguishable.
Issues
- Whether sales of imported ship stores from these bonded warehouses qualified as sales in the course of import or export exempt from State sales tax.
Provisions considered
- Sections 5 and 2(ab), Central Sales Tax Act, 1956The claimed import/export protection failed because the transactions did not occasion import or export and the goods had crossed the defined customs frontiers before appropriation in these warehouses. (¶¶ 13, 14, 20, 21, 24, 25, 26)
- Sections 2(10), 2(11), 2(12), 2(13), 2(29) and 7, Customs Act, 1962The statutory definitions and notification of customs stations did not establish that these bonded warehouses lay within a customs port or land customs station. (¶¶ 14, 15)
Held
- The sales did not cause import and lacked a direct linkage with its process. Appropriation took place in bonded warehouses on the State’s land mass after movement beyond the customs station, and the appellants did not show those warehouses were within the notified station. The Section 5(2) protection was therefore unavailable. (¶¶ 10, 12, 13, 14, 15, 17, 18, 20)
- The airport duty-free-shop precedent concerned sales and delivery within a customs airport before crossing the customs frontiers. It did not exempt sales from these warehouses merely because customs duty remained unpaid. (¶¶ 12, 16, 17)
- Stores intended for consumption aboard foreign-going ships did not qualify as exports to a foreign destination in these circumstances. Taking goods outside Indian waters alone did not establish the claimed export protection. (¶¶ 11, 21, 22, 23, 24)
- No relevant declaration under Section 69 was established on the record. In any event, waiver of customs duty did not waive sales tax, and Section 5(3) did not alter the result for these transactions. (¶¶ 25, 26)
Result
Appeals dismissed; sales-tax treatment under the applicable West Bengal Acts upheld. No costs; pending interlocutory applications disposed of.